Mr. Speaker, I rise today to support the budget that was tabled on February 22 by my colleague, the Minister of Finance.
The federal budget has set out a responsible course of action to bring the deficit under control and put Canadians back to work. It builds on the need to tackle the deficit, reform social programs and devise plans to assist our unemployed.
This budget reflects the government's belief that, by working together with Canadians, we must make changes to improve the economy. The budget's provisions will have a significant impact on every Canadian, but I believe the Minister of Finance has struck an equitable balance between spending restraints and carefully-planned measures that will encourage economic growth.
The goal of the budget, said the Minister of Finance is, and I quote: "- a balanced approach to fundamental reform-to create jobs, to continue to care for those in need, and to get the deficit down". Indeed, the diverse nature of Canada's economy places ever-increasing importance on a fast, reliable and low-cost transportation system.
Transportation is the life-support system of the country's exports and a critical factor in the competitiveness of Canadian industry. A prime example of the importance of transportation efficiency is the share of export prices attributable to transport costs. Between 18 and 45 per cent of the selling price of our primary products-coal, forest products, grain and lumber-goes to transportation. Transportation represents an estimated five per cent of the cost of manufactured export goods and, in some cases, is as high as 17 per cent.
The transportation industry is a major employer, providing for more than 442,000 direct and 378,000 indirect jobs-many of them highly skilled.
There are many significant challenges facing the transportation sector in our country. Changes brought about by the General Agreement on Tariffs and Trade and the North American Free Trade Agreement demand an efficient transportation system. With the globalization of markets and new trading arrangements, Canada's focus is shifting to the growing north-south traffic and our increasing exports and passenger travel overseas.
Our east-west transportation demands must continue to be met and these needs should expand in the future with the successful completion of internal trade negotiations and improved market access for our primary commodities through the Uruguay round agreements.
However, our transportation industries, notably the airlines and railways, have suffered and continue to suffer major financial losses. Canada's two major airlines are in serious financial difficulty. Only time will tell whether they can survive.
Recent developments, such as the end of the Air Canada legal action and the entanglement with Canadian Airlines International over Gemini and other issues, illustrate our commitment as a government to work closely with the industry in every way and certainly to try to improve its commercial viability and its ability to compete in the global marketplace.
We are looking forward to analysing any proposals that may be brought forward by CN and CP to merge or otherwise rationalize their operations in Canada from coast to coast. Our evaluation of any rail rationalization proposal will attempt to strike the appropriate balance between the needs of users and the interests of workers. However, I want to stress that for me, for the government and for the department our primary concern will be the interests of the Canadian taxpayer.
Our decision will take into account the many dynamic changes in the North American rail industry and the economy in general, including the growing importance of north-south traffic, intermodal competition and integration, the possibility of increased competition from south of the border, which certainly exists, technological change and any potential economic efficiencies we may be able to achieve.
VIA Rail is another entity for which our department is responsible and which faces a very, very troubled future. There will have to be a remarkable combination of efficiency gains at VIA Rail and rationalization of its operations or the cost to the Canadian taxpayer to support VIA will escalate even far beyond where it is now.
We have to recognize that some of Canada's transportation systems are overbuilt and far too heavily subsidized. Ninety-five per cent of all Canada's air passengers and cargo are handled at only 25 of our many, many airports. Eighty-four per cent of rail traffic is carried on 33 per cent of the lines. Eighty per cent of port traffic passes just through 5 per cent of our ports.
We are spending a lot of money in this country for transportation. In the main estimates we have indicated that it is the government's intention to spend $619 million on the Canadian Coast Guard, $710 million on the air navigation system, $430 million on airports. We will pay $331 million for passenger rail services, $159 million for ferry services, nearly $650 million under the Western Grain Transportation Act and in excess of $100 million on the Atlantic Region Freight Assistance Act and the Maritime Freight Rates Act.
These are huge numbers, beyond the comprehension of most Canadians, but they are numbers that are going to have to be looked at very seriously.
We must separate the desirable from the essential-and the essential must be the focus of the transportation system of the future. There are tough decisions to be made. In this context, the budget calls on me, as Minister of Transport, to discuss with my provincial colleagues the development of a highly-effective, integrated, affordable, surface freight transportation system, and the redirection of subsidies to improve the efficiency of that system. For example, it has become clear that the national highway system in this country needs to be upgraded. The provincial and federal transport ministers have agreed on what has to be done. Now, the finance ministers must find a way to pay for it.
Scarce financial resources must be redirected to the development of an integrated, multimodal, affordable transportation system. We must bring together many of the components that are available to us in the transportation sector to make sure we have the best possible system. The challenge undoubtedly is going to be very difficult for industry to meet, especially for the railways and airlines when they are struggling to find more efficient ways
to conduct their business. The government too has to meet the challenges of very limited resources.
For our part at Transport Canada, we are implementing our own cost-cutting initiatives in keeping with the provisions contained in my colleague's new budget. We are pursuing approaches that involve a mix of modal integration, pragmatism, innovation and most of all hard-nosed realism. We are focusing on solutions that will be important for Canada's future rather than dwelling on the romanticism and nostalgia of the past, as important as Pierre Burton's view of Canada might be.
The budget provides for increases to the air transportation tax, an opportunity to demonstrate that we want to reduce the transportation cost burden on the taxpayer and shift costs to those who use the various systems.
Transport Canada provides many services. Users are contributing 42 per cent of the $2.1 billion cost of these services, but the taxpayer is picking up the remaining 58 per cent.
We are going to ensure that those who benefit most directly from a service or facility pay a fair share of the cost. A better balance between taxpayers and users was strongly supported by the Royal Commission on National Passenger Transportation and by the National Transportation Act Review Commission. Let me emphasize that Transport Canada's proposed fee increases for 1994-95 are related directly to inflation rates since the last increase.
The time has come for government to look at new ways of providing services. In his budget the Minister of Finance stated that we would look at initiating the concept of commercialization at Transport Canada.
I am a strong believer in the ability of the private sector to get the job done. In Canada, if ever there was a time when those who do the job best should be allowed to do just that, this is it.
We will look at every opportunity to collaborate with the private sector to provide transportation services to Canadians. We will not be timid about asking the private sector to do what it can do best. We will also make sure that the role of government, however, continues to be to set policy and to ensure adequate services for all Canadians.
Traditional ways of the past do not allow today for quick responses to rapidly changing needs. The government does not have to own and operate a system in order to achieve its public policy goals. I believe that commercialization is an attractive option since it brings business discipline to the provision of services often traditionally delivered by government.
Commercialization can take many forms from government operations to non-profit entities, special operating agencies and crown corporations and can include privatization, can include mixes of those various components. Regardless of the form it means we must adopt a businesslike approach which is more efficient, more responsive to clients and less dependent on the Canadian taxpayer. The benefits can be better capital planning, access to private financing, faster approval, easier introduction of new technologies and more user and client input.
There is great potential for commercialization including for example the air navigation system, St. Lawrence seaway activities, short line railways, coast guard. I believe that commercialization in these and many other areas of government activity can bring major savings to taxpayers and better service to clients. Any move to commercialization will respect our government's commitment to maintaining Canada's high standards in the transportation sector.
We cannot ask more of users than we ask of ourselves so I am pleased to tell the House today that new management initiatives at Transport Canada with respect to overhead costs will result in annual savings of some $50 million. This will involve the reduction in the number of positions in our department by about 1,000 over the next four to five years.
Overhead costs will be examined every year and in this context Transport Canada managers are aware of my very serious and deep concern about employees who may be affected by such changes that they must be dealt with sensitively and fairly in accordance with the government's workforce adjustment policy.
Over the years Transport Canada has achieved significant reductions in expenditures in the provision of facilities and services. Overall the net result has been a reduction, for example, in operation budgets from 1985-1986 to 1993-1994 of $.5 billion.
During the same period the workforce was reduced by 2,400 person years or over 11 per cent. These reductions have been achieved despite an increase in most aggregate workload indicators.
I have discussed some of the transportation issues that must be examined in the context of our new budget. I believe the components of the budget and the actions we are taking together with the co-operation of users of transportation services represent a balanced national program to meet Canada's needs.
Our government is fully committed to helping Canadians build a stronger economy. We intend to move forward on policies that will bring immediate gains in transportation efficiencies and we will try to protect jobs but we have to maintain transportation security and safety.
Canadians want to control their future and they are very respectful of their past. I have said on many occasions that aside from railroads and the nostalgia of the building of this great country, as important as it might be, we now have to look at the realities we face today. I will paraphrase the words of Geoffrey Simpson in the introduction of his book "Faultlines". He discussed the national railway as the national dream of the 19th century.
I think for most Canadians, as we go through this process of trying to find an equitable equilibrium between our resources and those services we want to provide for Canadians, recognize that there is a national dream at this stage in our nation's history. It probably has to do with taking care of people in social programs such as medicare.
Times have changed and we are going to have to reflect that. At Transport Canada because of the tremendous contribution that various sectors in the transportation industry have made to the development of Canada I know it is very difficult for many to accept these changes.
I believe that Canadians insist that their government have the means to maintain vital programs, policies and services and that we must have the flexibility to respond to priorities that we have become all too much aware of.
A national, integrated and affordable transportation system is not the new national dream. As we prepare for the 21st century a national, integrated and affordable transportation system is a national necessity.
